First Gen Corp said it has agreed to sell a 60% stake in its gas-fired power business to Enrique Razon’s Prime Infrastructure Capital Inc for PHP 50 billion ($850 million), marking a major shift in the country’s energy landscape.
The deal, subject to the finalization of definitive agreements and regulatory approvals, will give Prime Infra majority ownership in key First Gen subsidiaries that operate the 1,000MW Santa Rita, 500MW San Lorenzo, 450MW San Gabriel, and 97MW Avion power plants.
The transaction also includes the proposed 1,200MW Santa Maria project and the Interim Offshore LNG Terminal, all located in Batangas City.
The agreement, outlined in a signed term sheet, also allows First Gen to receive additional earnout payments contingent on meeting certain conditions.
The Lopez Group, through First Gen, will retain a 40% stake in the gas business. “This assures proper continuity and stability of its gas operating plants, which will greatly benefit consumers by way of more stable, predictable and lower prices,” the company said in a statement.
Prime Infra, the infrastructure investment vehicle of tycoon Enrique Razon, also owns Prime Energy, operator of the Malampaya gas field.
The company said the acquisition strengthens its role in securing the country’s long-term energy independence.
“This strategic partnership will enable us to further nurture, enhance and expand the natural gas platform, in line with national energy security goals,” Prime Infra said.
First Gen, a subsidiary of First Philippine Holdings Corp, has a total installed capacity of 3,668MW, accounting for around 18% of the country’s power generation. The firm is a leading independent power producer focusing on clean and indigenous energy sources.
Business News Asia